Hedge Fund Managers Discuss Shorting Viasat (VSAT), 2U (TWOU), Long Positions in Microsoft (MSFT), Others

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The Longs

We’ll now take a look at three of First Eagle Global Value Fund’s long positions as detailed in its latest investor letter.

Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) was one of the main contributors to the Global Fund Class A shares’ 3.92% return in the third quarter. Microsoft shares gained almost 14% during the third quarter on the back of “continued momentum for its cloud-distributed software business and its Office products, as well as promising signs for its customer relationship management business,” the letter explained.

“Microsoft’s management has maintained control over operating expenses while at the same time making sizable investments in many areas, such as cloud software, machine learning and artificial intelligence,” the note supplemented.

As most investors know, Microsoft Corporation (NASDAQ:MSFT) is quite popular among hedge funds, with 131 funds long the stock as of the end of June. That group included First Eagle Investment Management’s 23.45 million-share position valued at $1.2 billion as of June 30, and Stephen Mandel’s Lone Pine Capital, which held 17.29 million shares.

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Oracle Corporation (NYSE:ORCL)

Unlike its peer above, Oracle Corporation (NYSE:ORCL) lost 3.13% of its value between the start of July and the end of September. And, while First Eagle believes the decline was “modest”, it still had a large impact on its results, given the large exposure the fund has to the stock, owning 40.49 million shares of it worth $1.65 billion on June 30.

“Oracle continued its transition to providing its software via the cloud, and this entails a change from upfront license revenues to subscription-based license revenues. In the short term, the impact on results has been negative, but over the longer term, we believe this transition should be positive because of the annuity-like stream of payments the company is expected to receive. We remain comfortable with our position,” the letter assured.

Also long Oracle Corporation (NYSE:ORCL) was Phil Frohlich’s Prescott Group Capital Management, which disclosed ownership of 7,601 shares of it as of September 30.

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Sanofi SA (ADR) (NYSE:SNY)

Finally, there’s Sanofi SA (ADR) (NYSE:SNY), which tumbled by 7.44% over the third quarter, as its U.S. diabetes business exhibited some feebleness. “The company’s US patent for Lantus, its primary insulin drug, expired in 2015, and competition from less expensive biosimilars weighted on Sanofi’s share price. At the same time, Sanofi’s vaccines business and the specialty care areas its acquired in the purchase of Genzyme did well during the quarter,” the letter said.

It’s long position in Sanofi SA (ADR) (NYSE:SNY) is a new holding added to First Eagle’s portfolio, the size of which has not been disclosed yet. We do know, however, that the company was also owned by Warren Buffett’s Berkshire Hathaway, which held 3.9 million shares at the end of the second quarter.

Interested in generic drugs companies? Check out our list of the 11 Biggest Generic Drug Companies in the World.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned in this article.

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